The following is a summary of the Transcontinental Inc. (TCLAF) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Q4 revenue reported a 2.8% dip primarily due to lower volumes in the packaging and printing sectors.

• Adjusted EBITDA increased 3.1% to $145.5 million, driven by a strong media sector performance.

• Financial expenses increased to $18.3 million, a rise of $7.8 million due to fluctuating exchange rates and increased interest rates.

• Adjusted net earnings per share rose by 5% YoY, reaching $0.0083.

• Revenues from the packaging sector decreased by 2.9% to $420.8 million, while printing revenues dropped 4.8% to $311.3 million.

• Cash flow from operating activities rose $142.7 million YoY, reaching $246.2 million, backed by an improved working capital and a new factoring program implementation.

• The net debt ratio was reduced from 2.47 in fiscal 2022 to 2.06, and CapEx was lowered to $29 million.

Business Progress:

• The key focuses are growth in profitability and organic terms, strong return on assets, net debt reduction, and sustainable products commercialization.

• Expected to start production in its Spartanburg facility with installed BOPE Line by mid-2024.

• Plans to increase profitability through a reduction in fixed costs, quick decisions on less profitable operations, lessening cost of goods sold, and dealing in real estate assets.

• Transcontinental announced the closure of its packaging plant in Tomah, Wisconsin, and the replacement of Publisac by raddar throughout Quebec extension to Ontario and British Columbia.

• A new program to improve profitability by reducing structural costs is underway.

• In fiscal 2024, packaging profitability is expected to improve despite volume pressures, but a reduced adjusted EBITDA is predicted for print due to volume reduction.

• The firm anticipates CapEx to reduce to $135 million in fiscal 2024, with concentration on the first half.

• Prioritizing debt repayment for stronger free cash flow by 2025.

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